How to Start Online Trading in 4 Simple Steps

Here are four essential steps to online trading and answers to commonly asked questions.
How to Start Online Trading in 4 Simple Steps
3 mins
22 August 2023

To start trading online, you need to open a Demat and trading account with a stockbroker. After opening a Demat account, you can add money by logging in to your bank account. The best share trading platform allows you to view stock prices, historical data, charts and enables you to buy and sell shares in India. Explained below are the steps on how to start trading online in India:

Four steps to start online trading in India

1. Choose an online broker

The first step will be to find an online stockbroker. They provide you with the facility to open a Demat and trading account. A trading account helps you place a buy or sell order in the stock market, whereas a Demat account stores the shares you buy in a digital format.

While choosing a stockbroker, check the Demat and trading account opening charges and the Demat annual maintenance charges (AMC). Bajaj Financial Securities Limited provides you with an option to open a free* Demat and trading account with zero account opening charges and zero AMC for 1st year through its Freedom Pack (AMC of Rs. 431 per annum is applicable from the second year onwards).

Next, you must check the brokerage charges. The broker charges a brokerage fee whenever an order placed in the stock market gets executed. This fee can depend on the trading volume of your order, or it can be a flat fee per trade irrespective of the trading volume. Traditional brokers levy percentage-based brokerage proportional to the trade volume, which increases the brokerage costs if you trade more often. With a flat fee per order, you can save significantly on brokerage costs. Bajaj Financial Securities offers a flat fee per trade which can save you big on the brokerage charges.

2. Open demat and trading account

To open a Demat and trading account, you need to fill an online account opening form with the broker. The form filling process is easy, and you can complete it in less than 15 minutes. With Bajaj Financial Securities, you can open an account by following the below steps:

  • Visit the account opening form link.
  • Enter your basic details, such as name, email id, PAN No, DOB, etc.
  • Provide your address and bank details.
  • Upload documents related to your proof of identity and proof of address.
  • Please choose from our affordable subscription plans. If you want to open a free* account, you can select the Freedom Plan.
  • Perform a self-verification by recording a short video of yourself and submitting it.
  • E-sign your form through the OTP sent on your Aadhar linked mobile number.
  • Submit the application, and you will receive a confirmation regarding your account opening and login credentials in a short duration.

3. Login to your Demat/ trading account and add money

Once you have your Demat and trading account login and password, you can log in to your account and explore the trading platform. If you have signed up with us, you can download our mobile trading app for a seamless trading experience.

Now that your account is created, you can add money from your bank account to your trading account. Note that you can also transfer money from your trading account to your bank account.

4. View stock details and start trading

Now you are ready to get started with online trading in india. You can view the live market prices of shares in your trading account. You can select a share and view its in-depth detail, historical prices, charts, etc. Once you are through your analyses, you can start buying shares and start your investment journey.

*Account opening is free for Freedom Pack, with zero subscription charges for 1st year & Rs. 431 p.a. from the second year.

Benefits of online trading

Online trading offers numerous advantages for investors:

  • No middlemen: Online trading eliminates the need for middlemen, brokers, or agents. Investors can directly access stock markets from the convenience of their homes or offices.
  • Paperwork simplification: It eradicates paperwork, making buying and selling stocks a hassle-free process.
  • Reduced costs: Online trading cuts out commissions typically charged by brokers, reducing the overall cost of investing.
  • Educational resources: Most online brokers offer free educational resources, enabling investors to better understand the markets and develop effective trading strategies.
  • Diversification: Online trading provides the opportunity to make well-informed financial decisions and diversify investments while keeping costs in check.

How to start trading online

Starting online trading, even as a novice, is relatively straightforward:

  • Open a Demat and trading account, deposit funds, and begin trading through a broker's online platform.
  • Remember to declare all profits from online trading for taxation purposes.
  • Utilise trading platforms offering real-time data, stop-loss orders, and margin accounts to enhance your trading experience.

Additional read: Day trading for beginners

How to choose stocks for trading

Efficient stock trading requires various analysis methods, including fundamental and technical analysis:

  • Fundamental analysis: This involves evaluating a company's valuation, key ratios, and intrinsic value. If a stock's market price exceeds its intrinsic value, consider waiting for a price drop. Conversely, if the market price is lower than intrinsic value, it may be a buying opportunity.
  • Technical analysis: Analyse price trends and trading volume through charts and indicators like Bollinger bands, MACD, and candlestick charts to forecast price direction.
  • Conduct due diligence by reading news, researching companies, and seeking broker recommendations before investing.

How to open a trading account online

Opening a trading account online involves several steps:

  • Choose a reliable brokerage partner by checking reviews, ensuring they handle high volumes efficiently, and provide timely information.
  • Examine brokerage costs, including flat fees or a percentage of trading volume, to make an informed decision.
  • Complete an online Demat account opening form with details like PAN number, bank information, identity and address proof, and date of birth. E-sign the document sent to your registered mobile number.
  • After receiving login credentials, access the trading platform to execute trades.

Additional read: Fear and greed index

The process of stock trading for beginners

For beginners venturing into stock trading, understanding the process and acquiring essential knowledge are paramount. Here's a breakdown of some simple tips to kickstart your journey:

  1. Open a Demat account: The first step is to open a Demat account, which serves as a digital repository for your stocks. This account enables seamless trading and facilitates the holding and transfer of shares electronically.
  2. Understand stock quotes: Familiarise yourself with stock quotes, which provide valuable information such as the current price, bid price, ask price, volume, and other relevant data. This understanding is crucial for making informed trading decisions.
  3. Bids and asks: Learn about bids and asks, which represent the prices at which buyers are willing to purchase and sellers are willing to sell shares, respectively. Understanding these terms helps in comprehending market dynamics and executing trades effectively.
  4. Fundamental and technical knowledge of stocks: Develop a basic understanding of fundamental and technical analysis techniques. Fundamental analysis involves assessing a company's financial health, management, and industry prospects, while technical analysis focuses on analysing historical price movements and market trends using charts and indicators.
  5. Learn to set stop losses: Implementing stop-loss orders is essential for managing risk in stock trading. A stop-loss order allows you to set a predetermined price at which your shares will be automatically sold, helping to limit potential losses.
  6. Seek expert advice: Don't hesitate to seek guidance from experienced traders or financial advisers. Their insights and expertise can provide valuable perspective and help navigate the complexities of the stock market.
  7. Start with safer stocks: Begin your trading journey by investing in safer, well-established companies with a track record of stability and growth. These stocks typically exhibit lower volatility and may be less risky for novice traders.

Conclusion

In conclusion, venturing into online trading in India necessitates a systematic approach starting with selecting a reputable online broker offering favourable account terms and competitive brokerage charges. The process involves opening a Demat and trading account followed by adding funds and familiarising oneself with the trading platform. The benefits of online trading, including cost reduction, accessibility, and educational resources, underscore its appeal to investors. Moreover, efficient stock selection strategies, encompassing fundamental and technical analyses, are pivotal for success in the dynamic stock market landscape.

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Standard Disclaimer

Investments in the securities market are subject to market risk, read all related documents carefully before investing.

Research Disclaimer

Broking services offered by Bajaj Financial Securities Limited (Bajaj Broking) | REG OFFICE: Bajaj Auto Limited Complex, Mumbai –Pune Road Akurdi Pune 411035. Corp. Office: Bajaj Broking., 1st Floor, Mantri IT Park, Tower B, Unit No 9 &10, Viman Nagar, Pune, Maharashtra 411014. SEBI Registration No.: INZ000218931 | BSE Cash/F&O/CDS (Member ID:6706) | NSE Cash/F&O/CDS (Member ID: 90177) | DP registration No: IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN –163403.

Website: https://www.bajajbroking.in/

Research Services are offered by Bajaj Financial Securities Limited as Research Analyst under SEBI Registration No.: INH000010043.

Details of Compliance Officer: Ms. Kanti Pal (For Broking/DP/Research) | Email: compliance_sec@bajajfinserv.in/ Compliance_dp@bajajfinserv.in | Contact No.: 020-4857 4486 |

This content is for educational purpose only.

Investment in the securities involves risks, investor should consult his own advisors/consultant to determine the merits and risks of investment.

Frequently asked questions

Is it safe to trade online?

Yes. With many advanced measures of securities and authentication, it is absolutely safe to trade online. All brokerage houses now use the CDSL generated T-PIN based authentication mechanism. T-PIN is a one-time user-generated PIN that, once verified, can be used to place orders through the Demat accounts of CDSL. You can use this facility if your broker opens your account with CDSL.

Is stock investing safe for beginners?

Share trading is simple for beginners today, thanks to the advancement of technology. However, considering that it involves money, it is important to understand all the risks and rewards before you start investing. In fact, with Bajaj Financial Securities Limited investing is even simpler. You can invest in a basket of stocks curated by ‘PickRight’. This spares you the trouble of researching for hours and helps your portfolio grow with the right advice.

Is stock trading for beginners?

Yes, stock trading is for anyone and everyone you do not need any specific qualification to do stock trading. However, at the same time trading requires analysis, research, and understanding company’s balance sheet and its price patterns. The study of these concepts is called Technical Analysis and Fundamental Analysis. A good trader is someone who studies the market to acquire these skills. In the age of internet, learning these is not difficult at all as the access to information is easy and at times free. It is important to understand that learning these skills takes time and a stock trader should take risks accordingly.

Are stocks a good investment for beginners?

Stocks are one of the most attractive form of investment for beginners. Primarily because investing in stocks is very simple in the online world and beginners can start investing even with Rs. 100. Stock market allows beginners the room to learn while investing with low exposure of capital. With rising inflation, traditional sources of investments like Fixed Deposits for example have yielded far lesser returns than stock market. Especially after the pandemic, investors have rushed to the stock market after realizing the significance of investment.

How do I start trading?
  • Identify your stockbroker: The first step is to identify a stockbroker registered with any of the two depository participants- CDSL or NSDL.
  • Open a Demat and trading account: Open a Demat account and trading account with your stockbroker. You can open a free Demat account with BFSL’s Freedom Pack.
  • Add money to your trading account: Link bank account with your trading account and start buying and selling in the stock market.

You can view stock details, history, analysis, and charts to help you make a good decision.

Can I invest small amounts of money in stocks?

Yes, the beauty of investing in stock market is that you can invest on your own terms and with the amount you are comfortable with. You can start your stock market investment with amount as small as Rs. 100. You can learn while investing small amounts of money. With Bajaj Financial Securities beginners can also access curated stock baskets for long term investment (offered through PickRight*) and invest hassle-free. Start Investing Now!

What are the benefits of online trading?

The benefits of online trading far outweigh the costs. It is a secured, online method of trading financial securities that reduces the risk of losses and theft along with time delays. You can easily trade securities across geographical boundaries and multiply your wealth with careful research and analysis, which a robust trading system can support.

Online trading also allows you to experiment with various securities and trading strategies that you would not have been able to in a physical trading environment. Many complex and profitable strategies can be built with online trading in nanoseconds, and even bot trading is now an acceptable method for profit generation.

Should I be experienced to start trading online?

No. You don’t have to be experienced to start trading online in india. You can learn the steps as you apply for a Demat account with a broker. Once Demat and trading account are opened, you can start trading in India using simple instructions for delivery-based trading. There are demo videos and hand-holding sessions available online.

You can also read about various types of trading strategies and the process of trading to understand how things work in online trading.

How much money do I need to start trading stocks in India?

Stock Market has shares of thousands of companies listed. The prices of these shares can range from less than Rs. 10 to more than Rs. 50,000. Therefore, you can start participating in stock market with capital as low as Rs. 100. You need to meet the price of share and the associated brokerage costs.

Show More Show Less